New rules for developers in Prague

On January 27, 2022, the Prague City Council adopted a new Methodology of Participation of Investors in the development of Prague. This Methodology represent the first unified concept for the entire Capital of the Czech Republic and it introduces quite a few changes. So, what is new?

• Uniform rules are introduced for developers who are planning to build in Prague
• New tariffs for contribution of developers in the amount up to CZK 2300 m2/ MFA (main floor area)
• 100% of the collected funds will be returned to the locality in which the zoning plan is changed and new construction placed
• As a result, construction of new parks, kindergartens, schools and tram lines is expected
• The principle of calculation is introduced to support housing and the use of brownfield sites compared to “greenfield” sites.
• The city is entitled to make demands on developers in terms of the services to be provided - in addition to demands for the construction of parks or civic amenities, the city may require developers to build flats that will subsequently be transferred to its ownership
• Contracts developed shall now also include regulatory drawings agreed between the city, municipalities and developers - the aim of these drawings is to provide clarity and control over what will be built in a given area and who will build it
• Introduction of an investor participation fund to support the development of the city's infrastructure based on contributions received from developers